HEALTH CARE FUNDING ACT

Illinois General Assembly - Full Text of HB3745

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB3745

Introduced 2/18/2025, by Rep. Michael J. Kelly

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 105/5.1030 new
30 ILCS 105/5.1031 new
30 ILCS 105/5.1032 new

Creates the Health Care Funding Act. Establishes the Health Care
Funding Association for the primary purpose of equitably determining and
collecting assessments for the cost of immunizations and health care
information lines in the State that are not covered by other federal or
State funding. Requires assessed entities, which include, but are not
limited to, writers of individual, group, or stop-loss insurance, health
maintenance organizations, third-party administrators, fraternal benefit
societies, and certain other entities, to pay a specified quarterly
assessment to the Association. Sets forth provisions concerning membership
of the Association; powers and duties of the Association; methodology for
calculating the assessment amount; reports and audits; immunities;
tax-exempt status of the Association; an administrative allowance to the
Department of Public Health; and other matters. Amends the State Finance
Act to make conforming changes. Effective immediately.
LRB104 10249 BAB 20323 b

A BILL FOR

HB3745
LRB104 10249 BAB 20323 b
1

AN ACT concerning health.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 1.
Short title.
This Act may be cited as the
Health
5
Care Funding Act.

6

Section 5.
Definitions.
In this Act:
7

"Adults" means (i) all State residents who are over age 18
8
and under age 65 and (ii) all other persons over age 18 and
9
under age 65 who receive health care services in the State.
10

"Assessed entity" means any health carrier or other entity
11
that contracts or offers to insure, provide, deliver, arrange,
12
pay for, administer any claims for, or reimburse or facilitate
13
the sharing of the costs of health care services for any person
14
residing in or receiving health care services in the State,
15
including, without limitation, the following:
16

(1) any writer of individual, group, or stop-loss
17

insurance;
18

(2) any health maintenance organization;
19

(3) any third-party administrator;
20

(4) any preferred provider agreement;
21

(5) any fraternal benefit society;
22

(6) any administrative services organization and any
23

other organization managing claims on behalf of a

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1

self-insured entity;
2

(7) any self-insurer or other entity that provides an
3

employee or group benefit plan and does not utilize an
4

external claims management service;
5

(8) any governmental entity that provides an employee
6

or group benefit plan and does not utilize an external
7

claims management service;
8

(9) any entity, administrator, or sponsor of a health
9

care cost-sharing program; or
10

(10) any managed care organization.
11

"Assessment" means the association member's liability with
12
respect to costs determined in accordance with this Act.
13

"Association" means the Health Care Funding Association
14
created by this Act.
15

"Board" means the board of directors of the association.
16

"Children" means (i) all State residents who are under age
17
19 and (ii) all other persons under age 19 who receive health
18
care services in the State.
19

"Covered lives" means all individuals who reside or
20
receive health care in the State and who are:
21

(1) covered under an individual health insurance
22

policy issued or delivered in the State;
23

(2) covered under a group health insurance policy that
24

is issued or delivered in the State;
25

(3) covered under a group health insurance policy
26

evidenced by a certificate of insurance that is issued or

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LRB104 10249 BAB 20323 b
1

delivered to an individual who resides in the State;
2

(4) protected, in part, by a group excess loss
3

insurance policy where the policy or certificate of
4

coverage has been issued or delivered in the State;
5

(5) protected, in part, by an employee benefit plan of
6

a self-insured entity or a government plan for any
7

employer or government entity that (i) has an office or
8

other work site located in the State or (ii) has 50 or more
9

employees in the State; or
10

(6) participants or beneficiaries of a health
11

cost-sharing program or a managed care organization.
12

"Director" means a director of the association.
13

"Executive director" means the executive director of the
14
association.
15

"Health carrier" means an entity subject to the insurance
16
laws and rules of the State or subject to the jurisdiction of
17
the Director of Insurance that contracts or offers to contract
18
to provide, deliver, arrange for, pay for, or reimburse any of
19
the costs of health care services, including an insurance
20
company, a health maintenance organization, a health service
21
corporation, or any other entity providing a plan of health
22
insurance, health benefits, or health services.
23

"Health care information line" means any information line
24
or referral service, including, but not limited to, Illinois
25
DocAssist, that is available to providers in the State and is
26
funded pursuant to the association's plan of operation.

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LRB104 10249 BAB 20323 b
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"Health cost-sharing program" means any cost-sharing or
2
similar program that seeks to share or coordinate the sharing
3
of the costs of health care services and that in the preceding
4
12 months either has (1) coordinated payment for or reimbursed
5
over $10,000 of costs for health services delivered in the
6
State or (2) communicated by mail or electronic media to
7
residents of the State concerning their potential
8
participation.
9

"Immunization" means any preparation of killed
10
microorganisms, living attenuated organisms, living fully
11
virulent organisms, or RNA; any other medical material that is
12
approved by the federal Food and Drug Administration and
13
recommended by the national Advisory Committee on Immunization
14
Practices of the Centers for Disease Control and Prevention
15
and has been authorized for purchase by the Director of Public
16
Health for the purposes of producing or artificially
17
increasing immunity to particular diseases or facilitating
18
recovery from particular diseases; or any other similar
19
medical material that is designated an immunization for
20
purposes of this Act by vote of the Board.
21

"Member" means any organization subject to assessments
22
under this Act.
23

"Provider" means a person licensed by the State to provide
24
health care services or a partnership or corporation or other
25
entity made up of those persons.
26

"Seniors" means (i) all State residents who are over age

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LRB104 10249 BAB 20323 b
1
64 and (ii) all other persons over age 64 who receive health
2
care services in the State.

3

Section 10.
Health Care Funding Association created.
4

(a) There is hereby created the Health Care Funding
5
Association for the primary purpose of equitably determining
6
and collecting assessments for the cost of immunizations and
7
health care information lines in the State that are not
8
covered by other federal or State funding.
9

(b) The association shall be comprised of all assessed
10
entities.
11

(c) The Health Care Information Line Fund and the
12
Immunization Program Fund are created as special funds in the
13
State treasury. Immunization purchase funds shall be deposited
14
into the Immunization Program Fund, and health care
15
information line funds shall be deposited into the Health Care
16
Information Line Fund. Receipts from public and private
17
sources for these funds may be deposited into the respective
18
funds in the manner and method specified in the association's
19
plan of operation. Expenditures from the funds must be used
20
exclusively for the costs of operating any programs funded by
21
the association, at no cost to providers. Only the Director of
22
Public Health or the Director's designee may authorize
23
expenditures from the funds.

24

Section 15.
Powers and duties.

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LRB104 10249 BAB 20323 b
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(a) The association shall be a not-for-profit corporation
2
and shall possess all general powers as derive from that
3
status under State law and such additional powers and duties
4
as are specified in this Section.
5

(b) The directors' terms and method of appointments shall
6
be specified in the plan of operation. The board of directors
7
shall include:
8

(1) The Director of Public Health or the Director's
9

designee.
10

(2) The Director of Insurance or the Director's
11

designee.
12

(3) Three health carrier representatives.
13

(4) Two provider representatives, one of whom serves
14

primarily children and one of whom serves primarily
15

adults.
16

(5) One representative from a third-party
17

administrator that is not a health carrier.
18

The board of directors may include up to 3 additional
19
members as specified in the association's plan of operation.
20

The initial appointments of the members under paragraph
21
(3), (4), and (5) shall be made by the Director of Public
22
Health, after consultation with the Director of Insurance,
23
within 90 days after the effective date of this Act and before
24
adoption of the plan of operation.
25

(c) A director may designate a personal representative to
26
act for the director at a meeting or on a committee. The

HB3745
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LRB104 10249 BAB 20323 b
1
personal representative shall notify the meeting's presiding
2
officer of the designation. A director may revoke the
3
designation at any time.
4

(d) The board shall have the following duties:
5

(1) Prepare and adopt articles of association and
6

bylaws.
7

(2) Prepare and adopt a plan of operation.
8

(3) Submit the plan of operation to the Director of
9

Public Health for approval after the Director of Insurance
10

has the opportunity to comment.
11

(4) Conduct all activities in accordance with the
12

approved plan of operation.
13

(5) Undertake reasonable steps to minimize duplicate
14

counting of covered lives or duplicate assessments.
15

(6) Pay the association's operating costs.
16

(7) Remit collected assessments, after costs, refunds,
17

and reserves, to the State treasurer for credit to the
18

respective fund.
19

(8) Submit to the Director of Public Health, no later
20

than 120 days after the close of the association's fiscal
21

year, a financial report in a form acceptable to the
22

Director of Public Health.
23

(9) Submit a periodic noncompliance report to the
24

Director of Public Health and the Director of Insurance
25

listing any assessed entities that failed to either (i)
26

remit assessments in accordance with the plan of operation

HB3745
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LRB104 10249 BAB 20323 b
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or (ii) after notice from the association, comply with any
2

reporting or auditing requirement of this Act or the plan
3

of operation.
4

(e) The board shall have the following powers:
5

(1) Enter into contracts, including one or more
6

contracts for an executive director and administrative
7

services to administer the association.
8

(2) Sue or be sued, including taking any legal action
9

for the recovery of an assessment, interest, or other cost
10

reimbursement due to the association. Reasonable legal
11

fees and costs for any amounts determined to be due to the
12

association shall also be awarded to the association.
13

(3) Appoint, from among its directors, committees to
14

provide technical assistance and to supplement those
15

committees with non-board members.
16

(4) Engage professionals, including auditors,
17

attorneys, and independent consultants.
18

(5) Borrow and repay working capital, reserve, or
19

other funds and grant security interests in assets and
20

future assessments as may be helpful or necessary for
21

those purposes.
22

(6) Maintain one or more bank accounts for collecting
23

assessments, refunding overpayments, and paying the
24

association's costs of operation.
25

(7) Invest reserves as the board determines to be
26

appropriate.

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LRB104 10249 BAB 20323 b
1

(8) Provide member and public information about its
2

operations.
3

(9) Enter into one or more agreements with other State
4

or federal authorities, including similar funding
5

associations in other states, to assure equitable
6

allocation of funding responsibility with respect to
7

individuals who may reside in one state but receive health
8

care services in another. Amounts owed under an agreement
9

shall be included in the estimated costs for assessment
10

rate setting purposes.
11

(10) Enter into one or more agreements with assessed
12

entities for one or more alternative payment methodologies
13

for the respective assessed entity's covered lives.
14

(11) Assist the Director of Public Health in
15

qualifying for grant and other resources from the federal
16

government and adjust its procedures as may be needed from
17

time to time so that appropriate adjustments are made to
18

any assessment liability with respect to any person who is
19

eligible for federally funded services.
20

(12) Perform any other functions the board determines
21

to be helpful or necessary to carry out the plan of
22

operation or the purposes of this Act.

23

Section 20.
Assessments.
24

(a) The association shall maintain separate records for
25
each of the funds it maintains and allocate its operating

HB3745
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LRB104 10249 BAB 20323 b
1
income and expenses, as the board may determine among each of
2
the funds it maintains. Assessment rates shall be separately
3
determined in the following manner for each funded program:
4

(1) The Director of Public Health shall provide
5

estimated program operation costs, not covered by any
6

other State or federal funds, for the succeeding year no
7

later than 120 days prior to the commencement of each
8

year. The Director of Public Health shall provide this
9

estimate and shall update that estimate at times
10

reasonably requested by the association.
11

(2) Add estimates to cover the association's allocated
12

operating costs, including for the upcoming year, any
13

interest payable and estimated administrative allowance
14

payable to the Department of Health.
15

(3) Add a reserve of up to 10% of the sum of paragraphs
16

(1) and (2) for unanticipated costs.
17

(4) Add a working capital reserve in such amount as
18

may be reasonably determined by the board.
19

(5) Subtract the amount of any unexpended fund
20

balance, including any net investment income earned, as of
21

the end of the preceding year.
22

(6) Calculate a per child covered life per month, a
23

per adult covered life per month, and a per senior covered
24

life per month amount to be self-reported and paid by all
25

assessed entities by dividing the annual amount determined
26

under paragraphs (1) through (5) by the number of covered

HB3745
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LRB104 10249 BAB 20323 b
1

lives in each age band, respectively, projected to be
2

covered by the assessed entities during the succeeding
3

program year, divided by 12. At the option of the
4

association, the assessment may, instead, be calculated
5

(i) as a single per covered life assessment, not
6

segregated for child, adult, and senior covered lives, or
7

(ii) as separate child and adult covered lives assessment
8

with the senior covered lives included with the adult
9

covered lives.
10

(b) Within 45 days after the close of each calendar
11
quarter, each assessed entity must report its covered lives
12
and pay its assessment. Unless otherwise determined by the
13
board, the assessed entity that would have been responsible
14
for payment or coordination of payment or reimbursement of any
15
primary care provider health care services for any individual
16
shall be the entity responsible for reporting the respective
17
covered lives and for payment of the corresponding assessment.
18

(c) At any time after one full year of operation under
19
subsections (a) and (b), the association, upon two-thirds vote
20
of its board and the approval of the Director of Public Health,
21
may:
22

(1) make changes to the assessment collection
23

mechanism specified in those subsections; or
24

(2) add any health care information line or other
25

services to those services funded by this Act for which
26

the board determines funding pursuant to this Act is

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LRB104 10249 BAB 20323 b
1

desirable. Any changes made under this paragraph shall be
2

reflected in an updated plan of operation approved by the
3

Director of Public Health and made available to the
4

public.
5

(d) If an assessed entity has not paid in accordance with
6
this Section, interest accrues at 1% per month, compounded
7
monthly on or after the due date.
8

(e) The board may determine an interim assessment for new
9
programs covered or to cover any funding shortfall. The board
10
shall calculate a supplemental interim assessment using the
11
methodology for regular assessments, but payable over the
12
remaining fiscal year, and the interim assessment shall be
13
payable together with the regular assessment commencing the
14
calendar quarter that begins no less than 30 days following
15
the establishment of the interim assessment. The board may not
16
impose more than one interim assessment per fund per year,
17
except in the case of a public health emergency declared in
18
accordance with State or federal law.
19

(f) For purposes of rate setting, medical loss ratio
20
calculations, and reimbursement by plan sponsors, all
21
association assessments are considered medical benefit costs
22
and not regulatory or administrative costs.
23

(g) If there are any insolvency or similar proceedings
24
affecting any payer, assessments shall be included in the
25
highest priority of obligations to be paid by or on behalf of
26
the payer.

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LRB104 10249 BAB 20323 b
1

(h) The State treasurer shall supply funds as needed for
2
funded program operations throughout the State's fiscal year.
3
No later than 45 days following the close of the State's fiscal
4
year, the State treasurer shall provide an accounting for each
5
program's operating costs not covered by any other State or
6
federal program and advise the association of the final amount
7
needed to cover the prior fiscal year. The association shall
8
reimburse these costs within 45 days of receiving the
9
accounting, except that, with respect to all or any part of any
10
amount due that exceeds 105% of the amount that had been
11
projected by the Director of Public Health to be needed for the
12
fiscal year, the association may defer the payment and the
13
State treasurer shall include the deferral in the subsequent
14
year's accounting. If there is a deferral, any remaining
15
unreimbursed amount shall be included in the assessment
16
calculation by the association for the funds to be raised by
17
the association in the subsequent year.
18

(i) If the association discontinues program funding for
19
any reason, then any unexpended assessments, including
20
unexpended funds from prior assessments in the respective
21
fund, after the association's expenses, shall be refunded to
22
payees in proportion to the respective assessment payments by
23
payees over the most recent 8 quarters prior to
24
discontinuation of association operations.

25

Section 25.
Reports and audits.

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LRB104 10249 BAB 20323 b
1

(a) Each assessed entity is required to report its
2
respective numbers of covered lives in a timely fashion as
3
prescribed in this Act or the plan of operation and respond to
4
any audit requests by the association related to covered lives
5
or assessments due to the association. Upon failure of any
6
assessed entity to respond to an audit request within 10 days
7
after the receipt of notification of an audit request by the
8
association, the assessed entity shall be responsible for
9
prompt payment of the fees of any outside auditor engaged by
10
the association to determine such information and shall make
11
all books and records requested by the auditors available for
12
inspection and copying at a location within the State as may be
13
specified by the auditor.
14

(b) Failure to cure noncompliance with any reporting,
15
auditing, or assessment obligation to the association within
16
30 days from the postmarked date of written notice of
17
noncompliance shall subject the assessed entity to all the
18
fines and penalties, including suspension or loss of license,
19
allowable under any provision of any other State statute. Any
20
monetary fine or penalty shall be remitted to the respective
21
fund and, thereby, reduce future obligations of the
22
association for funding. The assessed entity also shall pay
23
for reasonable attorney's fees and any other costs of
24
enforcement under this Section.

25

Section 30.
Immunity.
Except for liabilities of assessed

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LRB104 10249 BAB 20323 b
1
entities expressly provided in this Act or the plan of
2
operation, there shall be no liability on the part of and no
3
cause of action of any nature shall arise against (i) any
4
association member or a member's agents, independent
5
contractors, or employees; (ii) the association or its agents,
6
contractors, or employees; (iii) members of the board of
7
directors; (iv) the Director of Public Health or the
8
representatives of the Director of Public Health; or (v) the
9
Director of Insurance or the representatives of the Director
10
of Insurance, for any action or omission by any of those
11
persons related to activities under this Act.

12

Section 35.
Tax-exempt status.
The association is exempt
13
from all taxes levied either by the State or any governmental
14
entity located in the State.

15

Section 40.
Rulemaking.
The Department of Public Health
16
and the Department of Insurance may adopt rules to implement
17
and administer this Act.

18

Section 45.
Administrative allowance to the Department of
19
Public Health.
Within 45 days following the close of each
20
calendar quarter, the association shall transfer from
21
assessments raised a sum up to 10%, as determined by the Board,
22
of the costs funded by the association to the Health Care
23
Funding Act Administration Fund, a special fund that is

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LRB104 10249 BAB 20323 b
1
created in the State treasury, to be used by the Department of
2
Public Health to enable association members to meet their
3
obligations for funding health care services at a lower cost.

4

Section 50.
Prepayments; initial assessments.
To generate
5
sufficient start-up funding, the association may accept
6
prepayments from one or more assessed entities, subject to an
7
offset of future amounts otherwise owing or other repayment
8
method as determined by the board.
9

No assessment under this Act shall be due before January
10
1, 2027.

11

Section 900.
The State Finance Act is amended by adding
12
Sections 5.1030, 5.1031, and 5.1032 as follows:

13

(30 ILCS 105/5.1030 new)
14

Sec. 5.1030.
The Immunization Program Fund.

15

(30 ILCS 105/5.1031 new)
16

Sec. 5.1031.
The Health Care Funding Act Administration
17
Fund.

18

(30 ILCS 105/5.1032 new)
19

Sec. 5.1032.
The Health Care Information Line Fund.

20

Section 997.
Severability.
The provisions of this Act are

HB3745
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LRB104 10249 BAB 20323 b
1
severable under Section 1.31 of the Statute on Statutes.

2

Section 999.
Effective date.
This Act takes effect upon
3
becoming law.

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